SEZ-like model on Infy lips

- Subtle and not-so-subtle messages from guests

OUR BUREAU

Gopalakrishnan at PanIIT. Picture Sanjoy Chattopadhyaya

Calcutta, Dec. 8: Infosys has said it needs “SEZ or similar facilities” in the city, lending traction to an alternative that sets up a flexibility test for “the new IT policy” promised by Mamata Banerjee at the same venue yesterday.

“We need SEZ or similar facilities because that is what we get in other placesÖ. So if we have to start something now we have to look at something like that,” Infosys executive co-chairman Kris Gopalakrishnan said today on the sidelines of the PanIIT Global Conference 2012.

This is probably the first time that an Infosys official as senior as Gopalakrishnan is saying in public that the company is willing to consider incentives “similar” to those available for special economic zone.

Infosys had earlier put its Rajarhat project “on hold” after the state declined to recommend SEZ status for it. The chief minister has consistently opposed the status, which entitles a company to several tax benefits.

Bengal industries minister Partha Chatterjee, who had met Gopalakrishnan in Bangalore, has been talking of SEZ-like facilities but no details have been placed in the public domain.

“We need SEZ status, that is what we have told the government. They said they would figure out how they can provide other benefits. We said we will wait, we will work with the government and that is the status. There is nothing else that has happened after that,” Gopalakrishnan said today.

If Gopalakrishnan’s reference to “other benefits” is taken forward, it would mean that both sides have now laid down the parameters within which they will try to work out an arrangement.

Gopalakrishnan was speaking at a panel on the competitiveness of the IT industry in India at the same venue where Mamata made her pitch for investment in “beautiful Bengal” yesterday.

It remains to be seen if the IT policy Mamata promised will accommodate the concerns of companies like Infosys or the government will opt for case-to-case incentives.

While the Mamata government desperately needs to showcase a big-ticket investor, Infosys will be loath to give up the land already handed over to the company at an advantageous rate at Rajarhat.

The proposed Rs 500-crore facility in Rajarhat’s Action Area III is expected to generate around 5,000 jobs. Infosys had paid Rs 1.5 crore per acre for the 50-acre plot. But the market rate has now gone up to around Rs 15 crore an acre.

The challenges before extending facilities “similar” to SEZs are many. A friendly Centre could have found a way out for offering tax breaks — conversely, an unfriendly dispensation can drag its feet.

However, the state government can on its own offer some incentives such as relaxation of building rules.

The decisive factor will be how far the chief minister wants to go to persuade Infosys to start operations in the city. When minister Chatterjee had initially floated the plan for “SEZ-like facilities”, it did not stoke much enthusiasm in the government.

Since then, the situation has undergone a dramatic change. The Mamata government, drawing flak from multiple fronts, is under pressure to show results, especially on industrialisation.

In February, Infosys chairman emeritus N.R. Narayana Murthy had said the company was waiting for Bengal to fulfil “certain conditions” when asked about the Rajarhat project.

“If Infosys centres in other states are getting more benefits and the company’s competitors are getting more benefits, then...” Narayana Murthy had said, without completing the sentence.

Wipro is running an SEZ not too far from the Infosys plot. But it was the erstwhile Left Front government that recommended the status to the Centre.